ING has upped the ante in the war for savers' deposits, launching a new savings account which will pay a 6% interest rate for the first four months.
The interest paid after this period will then drop back to 5.4%, which also compares favourably with ING's competitors, with the closest comparable long-term rate on comparison site money.com.au at 5.1%.
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Conditions apply for bonus interest rate
To qualify for the ING bonus rate, customers need to grow their balance by $100 or more by the end of each month.
This also applies to the 5.4% rate, with the base rate of 2.25% activated if that condition is not met.
ING said in a statement that it was the biggest change to its savings products in 18 years.
ING Australia Head of Retail Jennifer Davies said:
Savings is one of the most important products we offer customers, and ING Savings Booster represents the biggest evolution of our savings proposition in almost two decades. As customer needs continue to evolve, we've taken the opportunity to rethink how our savings offering is structured. The result is a new product that combines competitive rates with a simpler approach to earning bonus interest.
To open an ING Savings Booster, customers must have an active Orange Everyday account in the same name, or apply for one when opening their ING Savings Booster.
Other high interest rate accounts include Rabobank's high interest savings account, which has a 5.9% rate for up to four months and then a base rate of 4%, and Ubank's Save Account, which has a rate of 5.85% for four months, then 5.1%.
The new ING product also has a higher upper limit on balances than its competitors, allowing balances of up to $2 million.
Ms Davies said the bank was keen to offer flexibility.
When it comes to saving, customer expectations are constantly shifting, and we recognise that people are looking for products that fit more seamlessly into their daily lives. ING Savings Booster was designed to give customers another way to grow their savings, and to make it easier for customers to get value from their savings while giving them more choice in how they manage their money. For us, it's about giving customers more choice and creating a savings experience that better reflects how Australians save today.
Term deposits failing to keep up
ING and other savings accounts are currently paying better interest rates – even at the base level – than most of the best term deposits listed on the finder.com.au comparison site.
Judo Capital Holdings Ltd (ASX: JDO) is currently paying the best rate, at 5.35% for 12 months.
